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Bankruptcy and Insolvency Archives

Defective security agreement found to be enforceable as against bankrupt

The common law provinces each have legislation dealing with the registration of security agreements against personal property. These acts, each of which are named the Personal Property Security Act ("PPSA"), provide a complex but complete code for registering security interests against property, and for determining the priority between various creditors' claims to that property. Proper security can protect a creditor's rights when a debtor goes bankrupt.

Understanding basic insolvency terms

Too often the basic terms in bankruptcy and insolvency law are used incorrectly and in a way which just makes things more confusing. Even professionals can be guilty of this. If on the other hand you understand the terms, then you will quickly understand the process and be able to identify and analyze the issues that may arise.

True Lessors Are Generally Exempt From Professional Fee Allocations Under the CCAA

In a recent case from the Nova Scotia Supreme Court Atlantica Diversified Transportation Systems Inc. (Re), 2018 NSSC 77, the court was asked to determine whether a true lessor of numerous trucks and trailers of the debtor, Canadian Western Bank ("CWB"), was liable to contribute to a $75,000 administration charge ordered in Companies Creditors Arrangement Act ("CCAA") proceedings that ended without a restructuring plan in place.

Canadians filing consumer proposals in record numbers

Filings from the Office of the Superintendent of Bankruptcy (OSB) show a worrisome trend among Canadians. While bankruptcies are declining in Canada, consumers are filing "consumer proposals" in record numbers. The OSB received 5,327 consumer proposals in January 2018, an almost 20 per cent increase from the previous month and a 10 per cent increase from January 2017.

Gwizd, (Re), 2017 BCSC 1975 - A bankrupt's equity in real property and agreements with the trustee

A recent decision of a British Columbia Master, sitting as a Registrar in Bankruptcy, has provided some much needed guidance to bankrupts and trustees with respect to non-exempt equity in a bankrupt's home where there is an agreement with the trustee.

Builders' lien trust in bankruptcies

Monies paid to a contractor in respect of an improvement on real property (the "Trust Funds") are subject to a trust (the "Trust") in favour of subcontractors, workers, and material suppliers, among others, who remain unpaid with respect to their work, services or materials (the "Beneficiaries"). The contractor is obligated to deal with the Trust Funds for the benefit of the Beneficiaries in accordance with the relevant builders' lien legislation. The contractors may be held liable for breach of the Trust if the Trust Funds are used for payments other than to Beneficiaries. In addition, third parties, such as directors of a corporate contractor, can also be held liable for breach of trust in a claim by the Beneficiaries if the Trust Funds are not used in accordance with the requirements of relevant legislation.

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